Match the correct motive (precautionary, speculative, or transactions) for holding money to the following definitions.

definition
a. the stock of money people hold to pay unpredictable expenses
b. the stock of money people hold to take advantage of future changes in the prices of financial assets other than money
c. the stock of money people hold to pay everyday predictable expenses

identify the motive for holding money in the following scenario.

daesun moves to a smaller apartment. because of the lower monthly rent, he places a larger share of funds from his paycheck in a retirement fund and a smaller share in his savings account. this is an example of a decrease in daesun's (precautionary, speculative, or transactions) demand for money.

complete the following statement about the relationship between the interest rate and speculative balances.

as the interest rate falls, the opportunity cost of holding money (rises, falls) , and people (decrease,

Suppose the marginal damage and marginal benefit curves in a polluted neighborhood are md = p/3 and mb = 4 – p. also, suppose that transactions costs are low, so that the consumers and the firm can bargain. we saw that in this case, the socially-optimal level of pollution is achieved. start by computing the socially-optimal p. then, for each of the following cases, compute the amount of money transferred through the bargaining process, and indicate who pays whom (i.e., whether consumers pay the firm, or vice versa). also, compute the gains to each party relative to the status quo (i.e., the starting point of the bargaining process).a)consumers have the right to clean air; firm is dominant in the bargaining process.b)consumers have the right to clean air; consumers are dominant in the bargaining process.c)firm has the right to pollute; firm is dominant in the bargaining process.d)firm has the right to pollute; consumers are dominant in the bargaining proces

Demand increases by less than supply increases. as a result, (a) equilibrium price will decline and equilibrium quantity will rise. (b) both equilibrium price and quantity will decline. (c) both equilibrium price and quantity will rise

Paddock pools constructed a swimming pool and deck for the jensens' home. paddock installed the wrong trim on the pool. it would cost $2800 to change the trim-one-fifth of the total cost of the pool. the jensens refuse to pay anything for the pool. the paddock's best defense is: (a) duress (b) substanial performance (c)mistake (d) failure of conditions